The Ministry of Mines oversees the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), a scheme designed to direct mining revenues back to the districts and communities affected by extraction activities. Launched in September 2015, the scheme operates through District Mineral Foundations (DMFs) set up across mining areas. It affects residents, local governments, and mining lease holders in districts where mineral extraction takes place.
How the scheme works and what it covers
DMFs are non-profit trusts formed to benefit people and areas harmed by mining operations. Mining lease holders must contribute to these foundations based on royalties paid on extracted minerals. Leases granted from January 2015 onwards contribute 10 percent of royalty, while older leases contribute 30 percent. As of July 2026, DMFs have been established across 656 districts in 23 States.
The collected funds are spent according to fixed priorities. At least 70 percent must go to high-priority sectors including drinking water, pollution control, healthcare, education, skill development, sanitation, housing, and agriculture. The remaining 30 percent can fund physical infrastructure, irrigation, energy projects, and watershed development.
Implementation has been substantial. Over 4.70 lakh projects worth more than one lakh crore rupees have been approved. Nearly 2.92 lakh projects are complete, while 78,809 works remain under construction with committed funds exceeding 30,512 crore rupees as of July 2026.
The scheme includes special protections for Scheduled Areas and Tribal communities, which are often located near mining sites and face particular vulnerability to extraction impacts.
What this means for you
If you live in a mining district, this scheme ensures that money from mineral extraction is spent on local needs like water, health, schools, and jobs rather than flowing entirely to state and national treasuries. Communities lose land, face pollution, and see traditional ways of life disrupted by mining, and PMKKKY attempts to offset these costs through infrastructure and services. The scheme recognises that those bearing the environmental and social burden of mining deserve tangible benefits in return.